Asia report: Markets down as investors close their wallets ahead of G20

Of the major components on the benchmark index, automation specialist Fanuc was down 0.52%, fashion firm Fast Retailing lost 0.4%, and technology conglomerate SoftBank Group was off 0.69%.

In Japan, the Nikkei 225 was down 0.29% at 21,275.92, as the yen strengthened 0.11% against the dollar to last trade at JPY 107.67.

The broader Topix index was 0.14% lower in Tokyo, closing its trading day at 1,551.14.

On the mainland, the Shanghai Composite lost 0.6% to 2,978.88, and the smaller, technology-heavy Shenzhen Composite narrowed by 0.96% to 1,562.42.

South Korea’s Kospi was 0.17% weaker at 2,130.62, while the Hang Seng Index in Hong Kong slipped 0.28% to close at 28,542.62.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics rising 1.08%, while chipmaker SK Hynix fell 1%.

Traders struggled for direction at the start of the Asian day, after a mixed session on Wall Street overnight ahead of the meeting between the US and China leaders, scheduled for Saturday.

The pair are expected to talk about the ongoing trade war between their economies, with investors hopeful - but not expectant - that they can move closer to some sort of resolution.

A fresh round of punitive tariffs is set to be slapped on another $300bn of Chinese imports, with many market watchers keen to see those averted by the outcome of the summit in Japan.

“The ongoing tension between the US and China is certainly more than just a simple trade war,” said London Capital Group senior market analyst Ipek Ozkardeskaya.

“Therefore, it will probably take more than this week’s meeting to agree on all aspects at stake.”

Ozkardeskaya noted that US Treasury secretary Mnuchin had recently stated that the two countries were “about 90% of the way” to reaching a deal, before adding that there was “a path to complete” an agreement.

“Although the chances of seeing a trade deal by the end of this weekend remain low, investors will be chasing any progress that could hint at an eventual resolution for the year-old trade dispute.”

Oil prices were mixed as the region entered the weekend, with Brent crude last up 0.05% at $66.58 per barrel, while West Texas Intermediate fell 0.15% to $59.34.

In Australia, the S&P/ASX 200 was off 0.71%, settling at 6,618.80 by end of trading in Sydney.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 went against the regional trend to rise 0.7%, closing at 10,501.10.

The down under dollars were a mixed picture against the greenback, with the Aussie last 0.04% weaker at AUD 1.4273, while the Kiwi strengthened 0.1% to NZD 1.4909.